Legal Highlights for Real Estate – December 2024
Amendment to the Construction Law
On November 5, 2024, during a meeting of the Infrastructure Committee, a draft amendment to the Act on Construction Law was presented, which was referred to an extraordinary subcommittee. The purpose of the amendments to this key law is to adapt the legislation to the new challenges of protecting citizens and meeting construction safety needs in the face of various risks.
The proposed amendment introduces a number of significant changes, including, among others, precise definitions of such terms as “protective structure,” “shelter” and “concealment.” Thanks to these settlements, the regulations will become clearer and allow for a more precise definition of construction requirements for objects designed to protect human life and health in emergency situations. The amendment’s rationale emphasizes that the introduction of these definitions is a response to the growing need to prepare protective infrastructure at the local level.
The main goals of the amendment are to improve existing regulations and enable local governments to effectively carry out their constitutional duty to protect citizens. The new legislation also takes aim at encouraging citizens to build home shelters and hiding places, which in an era of unpredictable threats, such as wars and natural disasters, is becoming an important element in securing people’s lives. In addition, the bill makes it compulsory for investors to comply with the new legal standards, which is taken to prevent negligence in matters of construction safety.
Amendment to the Act on real estate lease investment companies
The government is planning to introduce legislation to allow funds that invest in rental real estate, known internationally as Real Estate Investment Trust (“REIT”). Such funds allow the investment of funds in real estate, which is already in place in many countries. Under the Polish REIT project, the legislature is introducing a new investment vehicle – a joint stock company called Real Estate Rental Investment Company (“SINN”), whose shares will be listed on the stock exchange. REIT funds take a tax advantage, thanks to single taxation, instead of double taxation, which applies to standard companies – at the level of gross profit and dividends.
The bill stipulates that polish REITs will be able to invest in a wide range of real estate assets, such as residential rental apartments, student housing, boarding houses, nursing homes, office buildings, retail and warehouses.
The new regulations may particularly boost the warehouse market in Poland. SINN will be attractive to investors because Poland’s warehouse sector takes great potential for growth.
The potential of the REIT market in Poland is enormous. It is estimated that Polish capital, which can be invested in the country’s REITs on a long-term basis, is around PLN 20 billion. Of this, PLN 11.5 billion could come from individual investors and PLN 8.5 billion from institutional investors, such as Investment Fund Companies or Open Pension Funds.
